Gavin Parsons: Okay. Thank you.
Operator: Next, we’ll go to Noah Poponak at Goldman Sachs.
Noah Poponak: Hey, good morning, everyone.
Nick Stanage: Good morning, Noah.
Kurt Goddard: Good morning, Noah.
Noah Poponak: Are Boeing or any of the Tier 1 suppliers on the MAX that you sell into, communicating any change to the master schedule through the year to you at this point?
Nick Stanage: Well, we work primarily with the OEs on rates. And although we get pull and see signals from the supply chain, they really don’t provide guidance. And I can just say, Boeing is staying very — we stay very aligned with them and they communicate to us on a regular basis.
Noah Poponak: Okay. Fair enough. On the widebody side, and equally complex supply chain, but also fewer units. And those facilities sort of look very ready to go to higher rates and the order pace there has been surprisingly strong. I guess, what are the prospects for the — for getting to the planned rates faster or going higher than you recently were thinking on the widebody side?
Nick Stanage: Yeah, Noah. So again, if you look at the widebodies and how they’ve ramped since 2021, how smoothly they’ve ramped with really out issues, granted lower volume, but scale much larger. We have great confidence. We’re not seeing or hearing anything that indicates that there’s going to be bottlenecks for challenges. Obviously, time will tell and we’ll stay aligned with our customers. But we’re very optimistic and very bullish on, number one, all the orders that are coming in on widebodies as well as the expected ramp rates over the next two to three years.
Noah Poponak: Okay. And then just lastly, in your Defense business, the growth rate is just kind of step function higher. I know you talked about that being diversified, but I guess I’ll just ask again to try to better understand it. Is there any one mean program driver? Is that the Floral lamp? What’s behind that kind of tripling of the growth rate?
Patrick Winterlich: Yeah. Hi, Noah. I’ll grab that one. It’s definitely not the flower at this stage. I think that’s still a few years off before that will really have any impact. I mean, the biggest kind of moving program for us is the CH-53K over the last two, three years and probably in front of us still. We have such strong content such — like chipset, $2.5 million to $3.5 million on that. That, and we’re still adding elements and growing into that platform. That’s probably the biggest single one to call out. I think Europe has stepped up a bit in the last, certainly, we saw that in 2023. So that’s very positive for us. So I mean, we’re across so many programs, it’s hard to be specific. So I call out the CH-53K, I’d call out Europe stepping up the general positivity.
And I would also echo what I said a little bit earlier, 2023 was exceptional, a 17% growth for Space & Defense. So we’re guiding to mid-single digits. We’ll obviously do as well as we can, but 2023 was a somewhat sort of a standout year, I would say.
Noah Poponak: Okay. Thank you.
Nick Stanage: Thanks, Noah.
Operator: And we’ll take our final question today from Myles Walton at Wolfe Research.
Q – Myles Walton: Thanks. Good morning. I was wondering if you could say whether or not the level of composite materials, Commercial Aerospace sales was about what you expected, or is it a situation where the pull is just not coming through in real time, or are you just seeing it and you have the ability to see that it’s slow, you hope it gets better, but just trying to reconcile those two.
Nick Stanage: I think there’s nothing that really surprised us other than what we’ve mentioned, and that’s around the narrowbodies and the ramp being more challenged than what we expected when we entered the year. And again, not knowing all the issues that are driving that. I can tell you, it’s not Hexcel’s capability or capacity. We had not been a bottleneck for our customers. But clearly, there is supply chain and/or internal challenges that just prevented those rates from getting where we expected. Other than that, Myles, I think we’ve got very good visibility. I believe the supply chain is improving. I believe the narrowbody rates are going to increase. There may be some bumps in the road, but we cannot be caught short. We will not be caught short. And that’s what’s driving the pre-investment, the pre-training, to make sure we deliver to our highest potential here in the coming quarters and years.
Q – Myles Walton: Is it fair to think that you’ve done the hiring that you did for 2024 and 2023 already, given what you experienced?
Nick Stanage: In certain areas, we have, there certainly will be additional hiring, but the scrutiny and the focus the team has on getting the line efficiencies, again, remember, we’ve got multiple lines and we’ve been bringing them up, and that takes more head count, and with the amount of direct labor that have minimal experience, it just takes a little bit more to get that efficiency where we’re accustomed to back pre-pandemic levels. Clearly, we’re confident that it’s going to come, and we will get there, and we’re working to make that happen as fast as possible. But it’s not a step change. You’ll grow into it, and I like the trajectory. I like where we are on the efficiency gains I’m seeing in the plant. And I know the team will do the right thing on managing the cost going forward.
Q – Myles Walton: Okay. Thank you.
Nick Stanage: Thanks, Myles.
Operator: And this concludes today’s conference call, I want to thank you for your participation. You may now disconnect.
